5 Simple Steps to Stop Overspending Today
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You probably have the best intentions when it comes to saving money. You likely start off strong every month but then inevitably, your friends ask you to go out for a drink. A drink turns into two, and before you know it, you’re sitting down at a full-blown three-course dinner complete with dessert and a bottle of wine. There goes your budget.
With all the temptations out there, it can be hard to keep your finances in line. Of course, splurging here and there every once in awhile is okay. After all, money isn’t just for hoarding. But the habit of overspending can become a much bigger problem if you don’t keep things in check. Take these five steps to stop overspending today before everything gets out of hand:
Understand Your Triggers
Overspending is often caused by impulse shopping. When you’re out shopping, those little knickknacks in the checkout aisle can really get you. For whatever reason, some of us always pick something up while we are waiting at the checkout line, even though we don’t actually need any of those goodies. But why? Ask yourself that question. It’s important to understand what your triggers are. Do you spend because it gives you a thrill? Then maybe you should figure out some other way to be content. Or do you overspend simply because you’re bored and have nothing else to do? Perhaps you may want to start looking at your smartphone to keep you occupied. Understanding exactly why you overspend will help you get to the root of the problem and find lasting and realistic solutions.
Track Your Budget
The most important thing you can do to stop overspending is to actually have a budget and track your expenses. It’s not enough just to have a rough idea of how much you’re spending. You need to know exactly where your money is going and how much you’re spending on everything. Start logging the expense in the budget as soon as you can whenever you buy something or pay a bill. At the end of the month, sit down and analyze your spending habits. You might be surprised at what you find out, and even more surprised when you realize you can cut so much fat out of the budget without feeling much of a sacrifice.
Learn to Say No
Overspending has a lot to do with societal pressures. Sometimes it’s just really hard to say no. You might be trying to keep up with the Joneses, or maybe your friends are just constantly nagging you to go out. Whatever the reason, the pressure to conform can weigh heavily on all of us, and eventually it can affect your finances. Think about your priorities before you agree to anything. Is the decision going to hurt your finances, and should you really be making that commitment? Learning to say no is a big part of life and also a big part of being financially responsible. The sooner you learn the art, the closer you will be to financial independence.
Live Within Your Means
Here’s a simple thing you can do to improve your finances: don’t spend more than you have. Getting into the habit of spending every paycheck is dangerous even if you never get into debt, because emergencies do happen and you need savings to fall back on during those terrible times. It’s even worse if you overspend and fall into debt to make purchases. Once you owe money, you not only have to pay for what you buy but you also need to pay interest on what you owe, effectively making your paycheck smaller for the foreseeable future. Learn to live within your means. It’s certainly not easy at the beginning, but scaling back little by little will set you up for long-term success.
Allow Small Rewards
Personal finance is serious business, and most of the time it may not seem very fun. That doesn’t mean you can’t enjoy yourself in the process, though. Don’t forget to budget for a YOU fund. Allow yourself small rewards by having a no-questions-asked amount of money to spend on yourself every paycheck. You work so hard to accomplish your goals and you deserve to splurge here and there. Just make sure the YOU fund doesn’t cause you to go over budget, and you’ll be fine over the long term.
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